Top tips for managing the sale of a business
This quick guide gives you some top tips for making the sale of your business a success.
They are based on our many years’ experience of great transactions, so if you want to know more, please contact Skye Corporate Finance
Top Tip 1: Watch the clock
Too may business owners leave it too late. Time goes by at an extraordinary rate when you are running a business. Before you know it you are ten years further on, still entrenched in the company with no obvious route to an exit.
Top Tip 2: Prepare well
If you give yourself time you’ll get the business in good shape. Not just in terms of sorting out problem areas but presenting the business as well as you possibly can with positive trends, strong management (showing that you can step away from the business) and secure customers. Also check out your tax position and avoid any nasty shocks.
Top Tip 3: Private investigations.
Don’t treat your business as a commodity. Don’t just put a for sale sign up. Delve into the market. Have a look to see who’s buying, who’s selling and at what prices. Get a sense of whether you’ll get a good deal before anyone out there knows you are for sale. Base your next step on some certainty.
Top Tip 4: Negotiate sensibly.
It’s unlikely that anyone will give you want you want on a plate. So negotiate hard but be prepared to compromise at the right time. Keep an eye on the bigger picture, a sale could provide security for you and for your family and might be in the best interests of the business and its employees – these are worth a lot more than minor tweaks to the deal.
Top Tip 5: Consider alternatives.
A trade sale is not the be all and end all. Selling to management in an MBO deal, a share buy back, the sale of a minority stake to a venture capitalist or simply harvesting cash on an annual basis are all ways of extracting value and securing your personal position.